- Tech IPOs tend to bring high-risk and high-reward.
- Some investors are even dissuaded by signs of profitability, because that would indicate a company's maturity.
- Technology companies that have already matured may be less likely to grow.
Between 1990 and 2011, tech companies that were already profitable around the time of their IPO yielded an average 55% in their first three years of trading. Meanwhile companies that were unprofitable before their offering were up an average of just 22% over the same period.Investing ideas With that in mind, we decided to screen for technology companies that were profitable at or around the time of their initial price offering. We started with a universe of recent tech IPOs, built from lists on the New York Stock Exchange and the NASDAQ of recent filings. Then, we only screened for tech stocks that had positive profit margins. Since none of these companies are older than six months, as yet there is little data available about them. But we were still able to find four companies that are turning a profit. The next question is, will Twitter do the same? Click on the interactive chart below to see data over time. Do you see investment opportunities in recent IPOs? Use the list below as a starting point for your own analysis. 1. Evertec, Inc. ( EVTC): Provides various transaction processing services in Latin America and the Caribbean. Market cap at $1.73B, most recent closing price at $20.30. Net Profit Margin: 4.7%.
2. Gigamon Inc. ( GIMO): Designs, develops, and sells products and services that provide customers visibility and control of network traffic. Market cap at $1.08B, most recent closing price at $36.22. Net Profit Margin: 2.7%.
3. Professional Diversity Network, LLC. ( IPDN): A professional networking site and job board for Spanish, Hispanic, Latino, and bilingual professionals in the United States. Market cap at $31.59M, most recent closing price at $5.06. Net Profit Margin: 8.0%.
4. Ruckus Wireless, Inc. ( RKUS): Provides carrier-class Wi-Fi solutions to service providers and enterprises worldwide. Market cap at $1.36B, most recent closing price at $17.59.Net Profit Margin: 1.6%.
( List compiled by James Dennin, a Kapitall Writer. Quarterly sales sourced from Zacks Investment Research, IPO dates sourced from NYSE.com and NASDAQ.com. All other data sourced from Finviz.)